Inco Can Be Sued by Ontario Residents, Court Rules

Inco Can Be Sued by Ontario Residents, Court Rules

By Bloomberg

18th November 2005

Inco Ltd., the world's second-biggest nickel producer, can be sued in one lawsuit by residents of Port Colborne, Ontario, who say pollution from an Inco plant devalued their properties, an appeals court ruled.

The Ontario Court of Appeals today overturned two lower court rulings because it said the plaintiffs narrowed their claim to devaluation of property from a broader claim that included damages for alleged adverse health effects resulting from the pollution. ``That decision suggests a somewhat more liberal approach should be taken to certification of class proceedings,'' Judge Marc Rosenberg wrote on behalf of the three-member appeals panel.

It's the first time a Canadian court outside of Quebec has certified a class action suit against a company for long-term environmental damage Eric Gillespie, a lawyer for the plaintiffs said in a telephone interview. Inco may face further lawsuits for environmental damage in Sudbury, Ontario, where it has its main base of operations, he said. The ruling will also extend to other mining, forestry and manufacturing companies if they're deemed responsible for damaging the environment, Gillespie said.

``There are dozens, if not hundreds, of communities right across Canada where industries have operated for lengthy periods of time and there is the possibility that the industry has impacted the local community,'' Gillespie said. ``This decision will be binding on courts in Ontario and it will have persuasive precedent value for courts in all other jurisdictions.''

Comprehensive Lawsuit By certifying the case as a class action, the court allows all affected residents to sue in one comprehensive lawsuit rather than individually, giving them more leverage to achieve a settlement or victory at trial.

The class action also reduces the cost for the residents, many of whom are elderly, on fixed incomes or with disabilities and who can't afford to sue individually, Kirk Baert, a lawyer representing the plaintiffs, said in a statement.

Inco spokesman Bruce Drysdale didn't immediately respond to a request for comment.

Inco operated a refinery in Port Colborne, 145 kilometers (90 miles) south of Toronto on the shore of Lake Erie, from 1918 to 1984. Over the 66-year period the refinery spewed tons of nickel oxide into the air, which contaminated properties downwind from the plant, according to a September 2000 provincial Ministry of the Environment report.

Environmental Risk

The contaminants posed a risk to the environment and to human health for some of the residents of the town, the report said. Nickel oxide is classified by the Canadian government as a cancer-causing substance.

About 1,000 people live in the most affected area of Port Colborne, known as the Rodney Street area. The plaintiffs said house prices in the area declined about 45 percent when compared with other parts of the region after the Ministry of the Environment report was released.

Inco accepted responsibility for the soil contamination, the appeals court said. The company disputed the claim that the contamination lowered property values, saying the issue of its emissions in Port Colborne ``is an old and very public one.''

Gillespie said he expects about 8,000 people to be involved in the lawsuit because the environmental damage extends beyond Rodney Street, and actually reaches as far as the U.S.

The plaintiffs will ask for C$350 million ($294 million) to C$500 million in compensation, as well as punitive and exemplary damages, Gillespie said. They had sought C$750 million in the initial lawsuit, which included compensation for health problems.

The case is Between Wilfred Robert Pearson and Inco Ltd., Court of Appeal for Ontario, Toronto, C42414.